New Delhi, Jan. 31, 2025 (GLOBE NEWSWIRE) -- According to Astute Analytica’s latest market analysis, the Saudi Arabia Cloud services market was valued at US$ 3.82 billion in 2024 and is projected to reach US$ 13.97 billion by 2033, growing at a CAGR of 15.50% during the forecast period 2025–2033.
Saudi Arabia’s cloud services landscape is expanding at a remarkable pace, driven by the Kingdom’s focus on digital transformation under various nationwide initiatives. Organizations aim to modernize infrastructures, embrace data-driven decision-making, and improve operational efficiencies, prompting a rise in Infrastructure as a Service, Platform as a Service, and Software as a Service offerings. Major providers—such as Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud—compete on advanced analytics, artificial intelligence integration, and robust security protocols tailored to regional compliance requirements in cloud services market in Saudi Arabia. Government bodies are also turning to cloud platforms for e-governance, enhancing public services with faster data processing and resilience. Banks, fintech firms, telecom companies, and healthcare institutions remain key end users, as they allocate resources toward AI-based applications, big data insights, and scalable compute solutions.
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Some of the prominent cloud services include on-demand HPC (High-Performance Computing), IoT platforms for logistics, and AI-driven analytics for fraud detection and customer engagement. Sectors such as finance and healthcare deploy cloud-based solutions to streamline operations, while e-commerce and media companies rely on flexible storage and content delivery networks. The demand in the cloud services market stems from Riyadh’s thriving financial centers, Jeddah’s logistics and trade hubs, Dammam’s industrial expansions, and Khobar’s focus on commercial activities. These four cities lead in cloud adoption thanks to strong digital infrastructure and the presence of specialized data centers. As cloud-native applications proliferate, businesses seek specialized support for cybersecurity, data sovereignty, and compliance—key factors boosting service uptake each year.
Key Findings in Saudi Arabia Cloud Services Market
| Market Forecast (2033) | US$ 13.97 billion |
| CAGR | 15.50% |
| By Service Type | IaaS (35%) |
| By Deployment Type | Public Cloud (65%) |
| By Enterprise Size | Large Enterprises (60%) |
| By Industry Vertical | Financial Services (25%) |
| Top Drivers |
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| Top Trends |
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| Top Challenges |
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Drivers, Challenges, and Key Trends
A primary driver behind Saudi Arabia’s cloud services market is the substantial investment from major global providers. For instance, AWS is injecting over $5.3 billion into launching an infrastructure region by 2026, comprising three Availability Zones. Similarly, Oracle has announced a $1.5 billion investment to enhance its cloud infrastructure in the country. These financial infusions are creating robust opportunities for local collaboration, improving service quality, and boosting overall confidence in the market. The data center storage market also underscores growing demand: it is expected to rise from USD$ 488.59 million in 2025 to US$ 924.36 million by 2030, demonstrating how organizations increasingly depend on scalable, secure, and cost-effective storage solutions. Furthermore, Saudi Arabia’s forward-thinking corporate culture and widespread digitization efforts are key trends shaping adoption. Cloud computing alone is projected to create nearly one million IT job openings over five years globally, and a substantial portion of these positions will emerge in Saudi Arabia as local industries modernize.
However, cloud services market challenges revolve around data sovereignty, talent shortages, and establishing trust in new technologies. A direct reflection of both potential and complex regulatory environments is seen in the 1,759 cloud computing permits issued in the last quarter of 2023 – a 40% year-on-year increase that underscores demand but also highlights administrative considerations that businesses must navigate. Nevertheless, broader economic benefits and positive outlook cannot be overlooked. With AWS rolling out initiatives to train 4,000 women in cloud computing and providing certification opportunities to over 30,000 citizens, the future workforce is aligning with the sector’s trajectory. This focus on upskilling and local empowerment ensures that the Saudi Arabia cloud services market continues to thrive, forging a sustainable path and encouraging advanced technology adoption across multiple sectors.
Data Centers and Infrastructure Growth to Play a Role and Control the Highest Market Revenue
A vibrant data center ecosystem anchors the Saudi Arabia cloud services market. Existing facilities, such as those hosted by local enterprises and multinational providers, are rapidly expanding in capacity and scope. Several large-scale projects lead the charge, with Alibaba Cloud having established two data centers in Riyadh through a strategic joint venture. Recognizing infrastructure as a cornerstone for cloud development, the nation emphasizes power availability, cooling efficiency, and robust connectivity, laying a firm foundation for sustained growth. To expedite cloud adoption, the Saudi Cloud Strategy was unveiled in 2019, targeting both public and private sectors. This strategy has accelerated improvements in network coverage and has increased the variety of Infrastructure as a Service, Platform as a Service, and Software as a Service options. Meanwhile, the Government Cloud “Deem” initiative aims to unify governmental cloud efforts by establishing three data centers across the country, streamlining public-sector operations and delivering cost efficiencies.
The importance of infrastructure in the cloud services market is further underscored by the formation of the Cloud Computing Special Economic Zone (CCSEZ), which aspires to achieve 30% ICT spending within Saudi Arabia by 2030. In tandem, the escalation in cloud computing permits – seeing a 40% year-on-year increase by late 2023 – exemplifies the intensifying interest in building and operating data centers. Such developments not only boost local IT ecosystems but also capture international attention, attracting foreign investors seeking stable, well-regulated markets. Crucially, the availability of local infrastructure helps reduce latency, enhance performance, and address data sovereignty concerns, demonstrating the kingdom’s readiness for large-scale cloud adoption. As this emphasis on data center capacity becomes even more pronounced, infrastructure growth will remain a pivotal force driving the Saudi Arabia cloud services market forward in lockstep with visionary government policies.
Regulatory Landscape And Government Initiatives to Add Fuel to the Demand
Regulation in the Saudi Arabia cloud services market plays a pivotal role in shaping the digital transformation journey. The government’s Cloud First Policy, introduced in 2019, mandates that all governmental entities prioritize cloud solutions over traditional infrastructure. Complementing this policy, the government also aims to digitize 70% of patient activities by 2030, reflecting a strong initiative to transform healthcare and other public services through cloud-based platforms. These policies not only power the local tech sector but also signal a wider commitment to global standards and emerging technologies. Moreover, Saudi Arabia’s regulatory strategy seeks to propel SMEs, which account for 90% of businesses and 60% of total employment. The uptake of cloud computing among SMEs is rising steadily, with 22.3% already using cloud-based content and collaborative solutions, while 15.7% make use of ERP modules in the cloud. This targeted focus on smaller enterprises aims to boost economic diversification and foster innovation across every layer of commerce.
Developments like the Government Cloud “Deem” initiative offer public entities a unified and secure platform, boosting confidence in e-government solutions. Meanwhile, the regulatory environment addresses data sovereignty concerns, ensuring that local data centers comply with strict legal requirements and global best practices. As a result, international players feel more secure forming alliances or investing in local data centers. Taken together, these government initiatives and regulatory frameworks create a fertile environment for robust growth in the cloud market. By setting out clear guidelines, offering financial incentives, and fostering local talent, Saudi Arabia significantly lowers the barriers to cloud adoption. Through these concerted efforts, the kingdom’s leadership demonstrates commitment to digital transformation, ensuring the cloud services market continues to expand while meeting modern demands for security, accessibility, and scalability.
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Future Prospects and Industry Impact to Rip the Most of the Saudi Arabia Cloud Services Market
The next few years promise enormous potential for the Saudi Arabia cloud services market, driven by both local and global dynamics. On a global scale, cloud computing is set to create nearly one million IT job openings within five years, with a substantial portion expected in Saudi Arabia as the country modernizes and invests heavily in technology. Locally, we are seeing new regulatory updates and an increasing number of cloud permits – 1,759 issued just in the last quarter of 2023 – that facilitate startups and established enterprises alike. Major tech players are also contributing to this bright horizon. AWS has initiatives to train 4,000 women and certify 30,000 Saudi citizens, reflecting a strong desire to build a skilled workforce that can meet the demands of a sophisticated digital economy. Further fueling economic interests is the Public Investment Fund (PIF) and Google Cloud partnership, expected to generate thousands of jobs and bolster GDP by $71 billion over the next eight years. Additionally, Google Cloud has opened its first cloud region in Saudi Arabia, aiming to deliver high-performance, low-latency services that align perfectly with the kingdom’s evolving infrastructural landscape.
Amid this transformation, SMEs hold a special place, harnessing cloud technology to reduce operational expenses and drive scalable growth. Evidence of the growing adoption of Software as a Service is seen in the fact that 58.33% of respondents reported the use of SaaS services back in 2017, a number that has only continued to rise as the market matures. Ultimately, the Saudi Arabia cloud services market’s impact is multifaceted. It accelerates economic diversification, boosts innovation, and nurtures talent development. As key stakeholders collaborate and future prospects unfold, the kingdom stands poised to evolve into a regional and global hub for cutting-edge cloud solutions, opening doors to an inclusive and prosperous digital era.
Saudi Arabia Cloud Services Market Key Players:
- Amazon Web Services (AWS)
- Microsoft Corporation
- Oracle
- IBM
- Alibaba
- Salesforce
- STC Cloud
- Zain Cloud
- Mobily Cloud
- Edarat Group
- Other Prominent Players
Key Segmentation:
By Service Type
- IaaS
- PaaS
- SaaS
By Deployment Model
- Public Cloud
- Private Cloud
- Hybrid Cloud
By Enterprise Size
- SMEs
- Large Enterprises
By Industry Vertical
- Healthcare
- Financial Services
- Retail
- Manufacturing
- Government
- Others
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